Strengthening the emerging market economies
Rules-of-thumb for guiding monetary policy
This article was originally published in the Board of Governors of the Federal Reserve System Open Market Policies and Operating Procedures-Staff Studies, July 1971. It is reprinted here as an addendum to these conference proceedings.
On the social cost of transparency in monetary economies
I study a class of models commonly used to motivate monetary exchange, extended to include a physical asset whose expected short-run return is subject to exogenous news events, but whose expected long-run return is independent of this information. I show that there are circumstances in which the nondisclosure of news by an asset manager is welfare-improving. When nondisclosure is infeasible, the framework admits a role for government debt. The theory is used to interpret the nondisclosure practices of reputable financial agencies and suggests caveats for legislation designed to promote ...
How Liquid Is the Inflation Swap Market?
Inflation swaps are used to transfer inflation risk and make inferences about the future course of inflation. Despite the importance of this market to inflation hedgers, inflation speculators, and policymakers, there is little evidence on its liquidity. Based on an analysis of new and detailed data in this post we show that the market appears reasonably liquid and transparent despite low trading activity, likely reflecting the high liquidity of related markets for inflation risk. In a previous post, we examined similar issues for the broader interest rate derivatives market.
What does interconnectedness imply for macroeconomic and financial cooperation?
Remarks at the Swiss National Bank-International Monetary Fund Conference, Zurich, Switzerland.
Conducting monetary policy: rules, learning and risk management
Remarks at the C. Peter McColough Series on International Economics, Council on Foreign Relations, New York City.